NLRB unreasonably relied on distinguishable precedent to deny revoking union dues checkoff

By Joy Waltemath

By Ronald Miller, J.D.

An administrative law judge impermissibly ruled that employees were not entitled to have an opportunity to revoke their dues checkoff authorization at the expiration of a collective bargaining agreement, ruled the D.C. Circuit. Here, the appeals court found that the NLRB’s precedent in Frito-Lay, Inc., relied on by the ALJ, was factually distinguishable from the instant case; however, the Board affirmed the ALJ without considering the implications of that difference. Thus, Board impermissibly departed from its established precedent without giving a reasoned explanation. The appeals court pointed out that, on remand, insofar as the Board might seek to reinstate the same result in favor of the employer and union, it would need to explain how it could do so consistently with Frito-Lay and Atlanta Printing or justify any departure from those decisions. Judge Silberman filed a separate dissenting opinion (Stewart v. NLRB, March 21, 2017, Srinivasan, S.).

Dues checkoff. An employee’s authorization for her employer to checkoff union dues from her wages is not irrevocable. Section 302(c)(4) of the LMRA, specifies circumstances in which an employee must be afforded the opportunity to revoke a checkoff authorization. Further, CBAs establishing the availability of a checkoff arrangement for paying dues also set out how an employee can revoke an authorization. In particular, an employer must have received from each employee, on whose account such deductions are made, a written assignment which shall not be irrevocable for a period of more than one year, or beyond the termination date of the applicable CBA, whichever occurs sooner.

The Board has long held that employers and unions engage in unfair labor practices if they checkoff union dues without an employee’s valid authorization. An employee has two distinct rights when he executes a checkoff authorization under a CBA: First, a “chance at least once a year to revoke his authorization” on the annual anniversary of his execution of the authorization; and second, a chance upon the termination of the CBA to revoke his authorization.

Revocation of authorization. Here, a retail grocer entered into a CBA with a union representing a unit of employees, and the agreement established the availability of a checkoff arrangement for paying dues. The agreement also prescribed the periods in which an employee’s authorization would be revocable. The authorization was irrevocable for a period of one year from the date of execution or until the termination of the agreement, whichever occurred sooner, and from year to year thereafter, unless written notice was given not less than 30 days and not more than 45 days prior to the end of the yearly period.

Between the expiration of the parties’ initial agreement on October 25, 2008, and the execution of the new one on November 12, 2009, a group of employees resigned from their union and sought to revoke their dues-checkoff authorizations. The union honored their resignations, but refused to give effect to their attempted revocation of their checkoff authorization. Accordingly, their employer continued to deduct union dues from the employees’ wages, and the union continued to accept the payments.

The employees initiated unfair labor practice charges against the employer. The NLRB General Counsel issued a complaint against the employer and union, contending that the continued deduction and transfer of union dues during the contract hiatus constituted an unfair labor practice. An administrative law judge dismissed the complaint in favor of the employer and the union, and the Board affirmed the ALJ’s rulings and adopted his recommended order.

Escape window. The employees challenge the Board’s decision on grounds that the Board’s precedent in Frito-Lay, Inc. could not be squared with the terms of Section 302(c)(4). Further, they argued that the Board should have treated their resignations from the union as requests to discontinue the checkoff of union dues at the earliest available opportunity.

The employees relied on Section 302(c)(4)’s directive that an employee’s checkoff authorization “shall not be irrevocable for a period of more than one year, or beyond the termination date of the applicable collective agreement, whichever occurs sooner.” According to the employees, the statute entitled them to revoke a checkoff authorization upon the expiration of the operative CBA, regardless of any language in a checkoff authorization purporting to require employees to seek revocation within a specified, pre-expiration escape window.

Contract expiration. In this case, the ALJ concluded that, although all employees had a 15-day revocation window connected to the yearly anniversary of their checkoff authorizations, they had no such revocation opportunity with regard to the bargaining agreement’s expiration. The ALJ twice explained that such an opportunity was confined to those employees who had signed an authorization in the contract’s last year. On that understanding, the facts in this case differed meaningfully from those in Frito-Lay, concluded the D.C. Circuit. Nothing in Frito-Lay purports to speak to a situation in which only those employees who sign authorizations in a contract’s final year are afforded a revocation opportunity tied to the contract’s expiration.

The Board summarily affirmed the ALJ’s decision. In doing so, it did not reject the ALJ’s understanding that the employees generally lacked any revocation window tied to the bargaining agreement’s expiration. Nor did the Board reject the ALJ’s treatment of this case as a routine application of Frito-Lay. Thus, the Board’s decision necessarily rested on the same flawed premise as the ALJ’s—that Frito-Lay directly controls this case. However, the Board’s treatment of this case as a routine application of Frito-Lay cannot be squared with the rationale of that decision. Accordingly, the appeals court “cannot uphold a decision where an agency departs from established precedent without a reasoned explanation.”

Dissent. Judge Silberman dissented from the court’s decision to remand the matter to the NLRB to resolve an ambiguity that he argued did not exist. Rather, he concluded that the Board’s interpretation of Section 302 was untenable. According to the dissent, the Board adopted an anti-textual interpretation of the phrase, “beyond the termination.” Essentially, the Board argued that if an employee’s authorization card conferred a window period in which to revoke authorization before the termination date and he or she does not revoke, he or she has forfeited the right after termination of the contract. This interpretation of Section 302 by the Board was flatly wrong, argued the dissent.

Source:: NLRB unreasonably relied on distinguishable precedent to deny revoking union dues checkoff